Friday, November 18, 2011

Stocks tumble late to end sharply lower

By msnbc.com news services

U.S. stocks are set to fall Thursday after a late sell-off in the prior session as investors kept a close eye on rising yields of debt in Europe.

Spain and France struggled with government bond auctions, throwing into sharp relief the threat of larger euro zone economies succumbing to the debt crisis that began in Greece and is already lapping at Italy?s shores.

Spanish bond yields hit 6.98 percent Thursday, their highest level since 1997, at a 10-year auction. A French bond auction also saw high yields.

The 7 percent mark is viewed by investors as unsustainable, with both Greece and Portugal forced to seek bailouts at similar levels, as Spain was pulled deeper into the euro zone debt crisis ahead of a parliamentary election on Sunday.

European shares fell, as the rising euro zone sovereign bond yields heightened worries that the currency bloc?s crisis would spread further and that the region is headed for recession.

Asian shares also wobbled as doubts deepened about Europe?s ability to stop the crisis from spinning out of control, with Germany and France split over the European Central Bank's bond buying role.

U.S. stock losses accelerated in the latter part of trading Wednesday after rating agency Fitch said while the outlook on the U.S. banking industry is stable, it could worsen if the euro zone crisis is not resolved quickly.

Investors have recently been forced to weigh the threat of a deepening crisis against U.S. economic data that has been better than expected.

Investors will have some significant economic data to digest Thursday, including weekly jobless claims data and a report on housing starts and permits for October from the Commerce Department.

The Associated Press and Reuters contributed to this report.

Source: http://bottomline.msnbc.msn.com/_news/2011/11/17/8855732-stocks-set-to-pull-back-amid-european-debt-fears

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